Distributed Ledger Technology and Smart Contracts

Distributed Ledger Technology and Smart Contracts

Key Glossary

Term DefinitionsBlockchainA distributed, immutable database of transaction records shared by multiple participants in a network.Smart ContractA piece of code stored on a blockchain that automatically executes when predefined conditions are met.EthereumAn open-source blockchain platform that supports smart contracts and decentralized applications (DApps).ERC-20 TokenA token standard on the Ethereum blockchain for creating and issuing fungible digital assets.Externally Owned Account (EOA)A blockchain account controlled by a user that is used to initiate transactions and interact with smart contracts.Contract AccountA blockchain account controlled by a smart contract that stores funds and executes contract logic.Peer-to-Peer (P2P) LendingA decentralized form of lending where borrowers and lenders transact directly through an online platform.Pooled Lending (P2P2P)A form of P2P lending where loan funds come from a pool of multiple lenders and are distributed to multiple borrowers.OracleA third-party service that provides external data to smart contracts.Bulletin Board Message Framework (BBMF)A publish/subscribe messaging framework for exchanging data between smart contracts and external systems. Global Variable Name System (GVNS) is a system used to share global variables between smart contracts. Short Answer Questions

What is the main difference between blockchain and traditional databases?

Explain the role of smart contracts in decentralized applications (DApps).

What problems does the nCash system described solve?

How does the nCash retail payment system work?

What are the different types of smart contracts used in the nCash platform?

Explain how the nCash peer-to-peer lending system utilizes collateral.

What are the advantages of the pooled lending (P2P2P) model over the traditional peer-to-peer (P2P) lending model?

What is the purpose of the Bulletin Board Message Framework (BBMF)?

How does the Global Variable Name System (GVNS) enhance the functionality of smart contracts?

Describe how the loyalty rewards program in the nCash platform works.

Short Answer Questions

What is the main difference between blockchain and traditional databases? Blockchain is a distributed, immutable database shared by multiple participants in a network, while traditional databases are usually centralized and controlled by a single entity. This distributed nature makes blockchain data more secure and transparent.

Explain the role of smart contracts in decentralized applications (DApps). Smart contracts serve as the backend logic of a DApp. They are self-executing contracts stored on the blockchain that trigger specific actions when predefined conditions are met, eliminating the need for middlemen.

What problems does the nCash system described solve? nCash solves challenges associated with retail payments, loyalty rewards, and peer-to-peer lending. It provides a decentralized platform that enables users to conduct transactions and manage their finances securely and efficiently.

How does the nCash retail payment system work? Users can use the nCash mobile app to make payments at supported merchants. The system utilizes QR code or barcode technology to facilitate transactions and allows users to receive change in the form of digital tokens that can be stored in their nCash wallets.

What are the different types of smart contracts used in the nCash platform? The nCash platform uses a variety of smart contracts, including token contracts, incentive contracts, loan contracts, identity contracts, credit rating and reputation contracts, and collateral contracts, to achieve its different functions.

Explain how the nCash peer-to-peer lending system utilizes collateral. Borrowers can provide cryptocurrencies or tokenized assets as collateral to obtain loans on the nCash platform. The collateral is stored in a multi-signature contract until the loan is repaid. If the borrower defaults, the lender receives the collateral.

What are the advantages of the pooled lending (P2P2P) model over the traditional peer-to-peer (P2P) lending model? P2P2P lending improves efficiency and scalability by pooling funds into loan pools. This approach simplifies the process of matching borrowers and lenders and allows for more flexible loan terms.

What is the purpose of the Bulletin Board Message Framework (BBMF)? BBMF facilitates data exchange between smart contracts and external systems. It acts as a publish/subscribe messaging system, allowing smart contracts to receive real-time updates from oracles, sensors, and other sources.

How does the Global Variable Name System (GVNS) enhance the functionality of smart contracts? GVNS allows smart contracts to share global variables, thereby enhancing interoperability between them. This functionality enables the construction of more complex and interconnected smart contract systems.

Describe how the loyalty rewards program in the nCash platform works. Users earn loyalty points for purchases made with nCash at supported merchants. These points can be redeemed for discounts or other rewards, incentivizing users to use the nCash platform.